Page 51 - EE Times Europe Magazine – November 2023

EE|Times EUROPE 51

OPINION | GREENER ELECTRONICS | HYDROGEN
scaling up of electrolyzer manufacturing
Green Energy Laws facilities. A further €4 billion in Innovation
Fund grants is to be made available before the
end of the year for projects of varying scales.
Of particular note, in March, the European
Changing the Energy Hydrogen Bank was established to acceler-
ate investment in hydrogen projects. The
Landscape in Europe EC recently released the Terms and Condi-
tions for the European Hydrogen Bank pilot
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auction, planned to open on Nov. 23, 2023.
The Terms and Conditions provide potential
By Patricia Tiller, Hunton Andrews Kurth bidders with information about the fiscal
design of the auction and the requirements
for compliant bids. The auction will award up
Europe’s push toward clean energy is codified in the Renewable to €800 million to renewable-hydrogen pro-
Energy Directive II (RED II). RED II and its Delegated Acts are a legal ducers in the European Economic Area in the
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framework issued by the European Commission to help the EU meet form of a fixed premium in euros per kilogram
its emissions-reduction commitments under the Paris Agreement. of renewable hydrogen produced over the first
Why is RED II of interest to the energy industry? RED II contains a 10 years of operation.
series of sustainability and emissions criteria with which various sec- Interestingly, further funding from the
tors (including transport, forestry, heating/cooling and electricity) Innovation Fund is expected to take the
must comply to be eligible for financial support from public author- form of an auction model (a departure from
ities. For example, RED II sets 2030 targets for the transport sector the current call-for-proposals system). We
to reduce greenhouse gas intensity by at least 14.5% and requires renewable energy sources expect there will be lessons learned from the
for at least 29% of the consumption energy used in transportation. These ambitious, binding European Hydrogen Bank pilot auction that
targets mean that sectors like transportation will be seeking innovative ways to utilize renew- may serve bidders well in future auctions to
able energy sources and to reduce carbon emissions. Along with funding and incentives for clean be held by the Innovation Fund.
energy, we expect to see fiscal disincentives for the continued use of fossil fuels, and failing to
take appropriate measures to curb carbon emissions will become costly for last movers. THE FUTURE OF EUROPE’S ENERGY
With political negotiations underway for the next recast of the Renewable Energy Directive TRANSITION
(to be known as RED III), the European Council (made up of ministers from each of the member Proposals to revise RED II are under review
states) is aiming to achieve climate neutrality in the EU by 2050. EU countries have been tasked by EU member states and interest groups.
with developing national renewable-energy action plans that set out how they will achieve these EU co-legislators have reached a provisional
targets. Progress toward national targets is a matter of public record and is measured every two political agreement on key areas of reform
years, when EU countries publish national renewable-energy progress reports. for the Renewable Energy Directive, and it is
possible that RED III will be adopted before
HYDROGEN UNDER RED II the end of the year. What will RED III mean
As the region with the highest number of hydrogen-related patents registered worldwide, the EU for the energy sector? We expect to see an
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is leading the way in green energy. However, until recently, there were no standards for what con- even greater increase in funding for renew-
stituted low-carbon hydrogen (and whether the standards should include green, blue and pink/ able energy and carbon-capture projects and
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4
purple hydrogen). In July 2023, two Delegated Acts regarding the use of hydrogen as a “renewable an increase in patents for technologies that
5
fuel of non-biological origin” entered into force, bringing clarity to the hydrogen space. The new support the energy transition. ■
regulations specify the conditions under which hydrogen produced via electrolysis can be consid-
ered climate-neutral/fully renewable. They also clarify the conditions under which production REFERENCES
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facilities for pink or purple hydrogen can qualify as partially renewable power. 7 1 tinyurl.com/sthyazx9
2 tinyurl.com/4j6cscvn
FUNDING AVAILABLE FOR GREEN ENERGY PRODUCTS 3 Green hydrogen is produced via electrolysis
With a regulatory framework for clean energy now evolving in Europe, public funding for green (splitting water molecules into H 2 and O 2 ) using
energy projects, including hydrogen projects, is widely available. Funding is available for any renewable electricity.
interested stakeholder with a planned project in the EU, though very few programs allow funding 4 Blue hydrogen is produced when natural gas is
to natural persons. Funding is available from two primary sources: split into hydrogen and CO 2 , using methane steam
• Funds financed by the 2021–2027 EU Budget reforming or auto thermal reforming, and the
• National funding available from granting authorities in each EU member country remaining CO 2 is captured and stored
Both the EU Budget and national funding schemes allocate funds through programs or instru- underground.
ments, each of which has a set of key objectives and associated qualifying criteria. For example, 5 Pink or purple hydrogen is produced via
the Connecting Europe Facility for Energy supports projects that link energy infrastructure electrolysis but uses nuclear energy as its source of
across two or more EU countries. The Innovation Fund, another funding program at the EU level power.
(rather than individual countries), supports innovative low-carbon technologies and encourages 6 tinyurl.com/5n72wkar
the use of renewable hydrogen at pre- and commercial scale. 7 tinyurl.com/mr3cf5a9
Individual projects may qualify for public funding from several sources, and funding instru- 8 The Terms and Conditions were released on
ments may be combined if there is no double-funding of the same project cost. Aug. 30, 2023.
This year, we have seen a growing focus on funding hydrogen projects. Of the €3.6 billion
awarded from the Innovation Fund thus far this year, more than half of the projects receiving Patricia Tiller is a partner at Hunton
grants are dedicated to producing green hydrogen, either as new production projects or the Andrews Kurth.

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